Stop Justifying Your Price and Start Touting Your Benefits
By Yvonne Weld
Many business owners fall into the trap of justifying their price over and over. You need to stop doing that right now. When someone hesitates to sign on the dotted line or to purchase your product, do you look at that as a lost opportunity or a gained opportunity? For many they look at it as a lost opportunity and justify it by saying "if that person has a problem with my price then I didn't want them as a client anyway". Now is the time to start looking at "no" as an opportunity. That potential client just gave you the perfect opportunity to tell him/her all the benefits they receive by utilizing you and your company or by purchasing your product.
By benefit, I am not talking about the advantages of your product or service – by now the customer knows why he was interested in the first place. Instead I am talking about why your client can't live without your product or service. You need to identify what your client will see as the "perceived benefit" for your product or service. It all goes back to "What's in it for me?"
Let's look at a bookkeeper as an example. A bookkeeper charges you an hourly rate to prepare your books for year-end calculations. Many look at that thinking – "well I can just do it myself and not incur the costs." The problem with this philosophy is many people do not realize in the long run they are actually costing themselves money because: a) their accountant will probably have errors to fix since, let's face it, most of us are not bookkeepers; and b) it will probably take you much, much longer to complete than most bookkeepers would take. In addition, by using a bookkeeper, you have given yourself time you would normally have spent struggling with your books to concentrate on other things that will grow your business and allow it to prosper and thrive. If you are spending just an hour per day doing various bookkeeping tasks, you just freed the equivalence of 6 weeks of time per year. Imagine where your business will be next year at this time with that extra 6 weeks to spend going to extra networking events, preparing a new marketing campaign or taking on an additional client.
Even less apparent is the potential return on investment for your client. Let's say, for an example, that a client hires you to do some potential client cold calling on their behalf. Using the older model of stating "I would be more than happy to help you, I charge $25 per hour and make an average of 20 calls per hour", your client is automatically looking at his potential client list of 100 people and thinking "I don't know if $125 is within my budget for this." Instead try pointing out the less obvious. When asked your price, state "I see you have a list of 100 clients, which will take me approximately 5 hours to complete. On average I am able to get 10% of those clients to meet with you. It is my understanding you can get ½ of those clients to sign with you. So, based on all of these calculations, I should be able to produce approximately 5 new clients for you." This client is now seeing the $ bills in his pocket as opposed to yours and at this point your price does not seem so daunting.
For those with products, just what is it that your product is doing that will make your customer's life easier? Ensure your sales campaign clearly identifies the benefits your client will gain – appeal to their emotions. Price should be the last thing on their mind because if done properly, the potential client will see your product as something they can't live without and the price will be a minor determining factor.
So what is the hidden return on investment you are providing to your client? The next time someone asks your price start by appealing to their emotions and explaining the return on investment for them. Once you have succeeded in hooking them on the perceived benefits and they truly see "What's in it for them", it is only then that you tell them your price. I have a good feeling that at that point they won't care as much about your asking price anymore.
About the Author
Yvonne Weld is the author of The Ultimate Guide to Creating a Thriving Business and is the owner of ABLE Virtual Assistant Services. For more information about The Ultimate Guide to Creating a Thriving Business and how you can protect your business from unexpected absences due to injury, sickness or even death, visit the Web site at http://www.thrivingbusinessmanual.com.
Yvonne Weld is the owner of Canadian based ABLE Virtual Assistant Services and the author of "The Ultimate Guide to Creating a Thriving Business". For more information visit http://www.thrivingbusinessmanual.com
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